Assignment Procedure Flashcards
With an assignment procedure what stages are normally combined?
Pre-exchange and pre-completion steps.
What is the landlord’s solicitor responsible for during pre-exchange?
Take instructions
Confirm receipt of application, set out any requirements.
If client wishes to proceed in principle, draft licence to assign and send to tenant’s solicitor.
What is the tenant’s solicitor responsible for during pre-exchange?
Take instructions
Apply for consent
Prepare draft contract (if applicable) and deduce title.
Forward licence to assign to assignee’s solicitor.
Answer pre-contract enquiries
Once agreed, engross the contract, obtain tenant’s signature, and send engrossment to assignee’s solicitor.
What is the assignee’s solicitor responsible for during pre-exchange?
Take instructions
Assist tenant’s solicitor if anything needed for consent.
Review draft contract and investigate title
Review and report on lease
Review the licence to assign
Raise pre-contract enquiries
Arrange for assignee to sign contract
What happens at the pre-exchange stage in relation to the consent application?
*Tenant’s solicitor will usually apply for consent early on in the transaction, as transaction hinges on this being successful.
*The landlord’s solicitor will ask the tenant’s solicitor to give an undertaking for costs. Tenants solicitor will want to ensure that they are in funds (have money in client account from client to cover undertaking).
*The undertaking will cover the landlord’s solicitor’s and surveyor’s costs in considering the application. It will be capped at a certain amount.
*Then, the landlord’s solicitor will draft a licence to assign.
*May take time for landlord, tenant and assignee to agree licence to assign final form.
Why would the assignor and assignee exchange contracts?
Perhaps anxious to bind themselves to the assignment subject to landlord’s consent
When the tenant’s solicitor deduces title, what will they provide?
Providing official copies for the leasehold title or if it is not a registered interest, then the landlord’s title. In either case, copy of the lease will be provided to the assignee’s solicitor.
What enquiries will the assignee’s solicitor raise?
The assignee’s solicitor will raise CPSE1 enquiries (as does a buyer’s solicitor in a commercial freehold transaction) but will also raise CPSE4 enquiries which are specific to the assignment of a lease.
What is he process for exchange?
The tenant’s solicitor and assignee’s solicitor exchange in similar manner as for a freehold contract (usually adopting Law Society B).
No deposit is usually payable for assignment of a rack rental lease (for an assignment of a long residential lease, a 10% deposit would be usual, just like for a freehold).
The contract may set a fixed completion date, or may specify that completion is conditional (e.g. on the landlord’s consent).
What are the landlord’s solicitor’s obligations during pre-completion?
Engross licence to assign in triplicate (3 copies), arrange for landlord to execute one copy.
What are the tenant’s solicitor’s obligations during pre-completion?
Arrange for tenant to execute one copy of the licence to assign.
Prepare and send a completion statement
Respond to requisitions on title
Approve deed of assignment and arrange for tenant to execute.
What are the Assignee’s solicitor’s obligations during pre-completion?
Arrange for assignee to execute one copy of licence to assign.
Obtain funds from assignee needed to complete as per completion statement
Raise requisitions on title
Raise pre-completion searches
Draft deed of assignment.
What pre-completion searches will the assignee’s solicitor conduct?
Pre-completion searches carried out if the lease is registered. Appropriate search is an OS1 of the whole of the tenant’s leasehold title. It does not matter if it is a lease of a part or whole, as it is not the landlord’s title that is being searched.
What form will the deed of assignment take?
Deed of assignment will be the TR1 if it is a registered lease.
What steps happen on completion?
the assignee’s solicitor sends the tenant’s solicitor the completion monies
the landlord’s solicitor, tenant’s solicitor and assignee’s solicitor agree over the telephone to complete and date the licence to assign
the tenant’s solicitor and assignee’s solicitor agree over the telephone to complete and date the deed of assignment
